FX.co ★ South Korean Won Strengthens on FX Swap Talks

On Thursday, the South Korean won appreciated to approximately 1,400 per dollar, showing a significant recovery from its recent lows. This improvement is attributed to growing optimism surrounding tariff discussions between Seoul and Washington, as well as the potential establishment of a dollar swap line. U.S. officials confirmed that a swap line with Korea is still under consideration, despite increasing political scrutiny of such measures during Trump's tenure. Meanwhile, President Lee Jae Myung met with U.S. Treasury Secretary Scott Bessent in New York, emphasizing the necessity for tariff relief to be economically justified. Seoul remains cautious about the proposed $350 billion investment package, concerned it could disrupt reserves. Though Japan has already secured tariff reductions through a $550 billion commitment, Korea’s agreement remains unresolved, hindering further gains. As a result, the won’s recovery is tenuous, reliant on tangible advancements in the swap and trade discussions. In parallel, the U.S. dollar remained strong, nearing recent peaks, as the market anticipated U.S. jobless claims data later in the day and the PCE inflation report on Friday.